Seven Steps To Budget Process Reform

The
House Budget Committee's Task Force on Budget Process Reform now
has the historic opportunity to review the congressional budget
process outside the constraints of an economic or budget crisis.
The task force should conduct a broad review of the budget process
and develop a comprehensive package of remedies. Unless task force
members can agree about defects in the process and about the goals
of reform, they have little prospect of agreeing to specific
reforms or of getting their recommendations adopted.

Seven
steps could help the task force to develop, and advance, a useful
budget process reform plan.

Seek Comprehensive
Reform

Substantial alterations in Congress's
budget process have been made on a piecemeal basis since its
adoption in 1974: Sequesters, spending caps, pay-go rules, and the
Byrd Rule, among others. It is tempting to believe that further
incremental changes could be easier than a wholesale overhaul.

Piecemeal changes, however, cannot address
fundamental features of the budget process most in need of reform.
Furthermore, absent a budget crisis, no vehicle for incremental
reforms is available.

A
comprehensive package may be even easier to pass than rifle-shot
reforms. Key committees, party factions, and the President exercise
effective or actual vetoes over changes in the budget process.
Because any single reform will be perceived as reducing the power
of one group, rifle-shot reforms can face significant opposition. A
comprehensive package can balance roles throughout the process and
appeal to a common good to overcome parochial interests.

Involve Relevant
Players

The
Task Force on Budget Process Reform should involve all significant
players in the budget process. Key members who go unconsulted could
become suspicious of the task force's recommendations. More
important, the consideration of differing views will lead to a
better reform plan.

Specifically, the task force should:

Invite the director of the Office
of Management and Budget (OMB) to testify; and

Seek the views of Appropriations, Ways and
Means, and other key committees.

The
House Republican Leadership has formed a separate task force on the
budget process that can help to secure input from party leaders,
the Rules Committee, and the majority party conference. Democrats
should be encouraged to appoint their own party group for these
purposes as well.

Review the History of the Budget Process

John
Cogan of the Hoover Institution argues that the critical factor in
controlling spending is centralization. Executive branch budgeting
is centralized in the OMB. The budget process adopted in 1974 tries
to assert centralized control over the congressional process. At
the same time, the process removes centralized control in the form
of the President's impoundment authority.

The
history of federal budgeting provides a valuable perspective on
alternatives to the current process. It also displays the variety
of attempted fixes that have worked better or not as well.
Specifically, the Task Force on Budget Process Reform should ask
the Congressional Research Service to prepare or update a brief
history of the budget process. It also should hold a hearing on
this topic.

Devise a Process Suited to a Balanced Budget
Amendment

The
House of Representatives adopted, and the Senate fell one vote
short of approving, a balanced budget amendment (BBA) last year.
Elections to Congress in 1998 could trigger the adoption of a BBA
just one year from now. Coping with the BBA would present new
imperatives for the congressional budget process. The Task Force on
Budget Process Reform should devise a process that, although not
predicated on the adoption of the BBA, is adaptable to its
requirements.

Recognize that
Congress Must Cooperate with the President

The
budget process is designed to wrest control of the federal budget
from the President, but Congress has failed in its effort to make
budget policy essentially on its own. The series of budget summits
over the past two decades were recognition of the need for Congress
and the President to agree on overall budget policy; after all, the
President shares legislative power through his use of the veto. If
Congress ignores the President in setting overall spending and
revenue targets, he can exercise his veto on individual tax and
spending bills, triggering negotiations at the end of the process
that would be preferable at the beginning.

Recognize that
Budgeting is Fundamentally Political

No
budget process can work in the absence of political agreement
within Congress or with the President. Budget procedures should not
form a legislative straightjacket that cannot be adjusted to cope
with economic events. Inflexible systems will fail exactly at the
point at which they are most needed. Procedures should allow for
adjustments but require overt action to fix responsibility.

Devise an
Enactment Strategy

Coming
up with a good plan is only half the job. The best budget reform
plan in the world cannot be enacted (through three committees in
the House and two in the Senate) without a planned effort. If the
Task Force on Budget Process Reform fails to consider what steps
are needed to enact its plan, or waits to do so until after a plan
is adopted, failure is almost certain. Involving key House
committees, the Administration, and the Senate in the process of
developing a new budget plan is one key to securing enactment.

If the
formulation of a comprehensive reform plan proves impossible, the
task force should consider reforms through changes in current House
rules and procedures. Pay-go procedures, enforcement methods, and
scoring conventions all would be amenable to alteration through
unilateral House action. A package could be combined into a
relatively substantial set of reforms if the Senate or the
President were unwilling to act.

Conclusion

Congress's budget process has changed
significantly since 1974, but always in the context of an immediate
budget crisis. The House Budget Committee's Task Force on Budget
Process Reform has the best opportunity in a quarter-century to
conduct a top-to-bottom review. The task force should be
comprehensive and inclusive in its considerations. Seeking quick
fixes or avoiding institutional hurdles to reform may appear
tempting, but doing so would forfeit any chance at major reform
without making passage of piecemeal changes any more likely.

--David M. Mason is Senior Fellow in
Congressional Studies at The Heritage Foundation.

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